ASX in the red, energy stocks drag

Resources and energy stocks led Australian shares down as iron ore crept to its lowest this year and the federal government unveiled a stricter approvals process for new coalmines and coal seam gas projects.

Asian markets shrugged off a strong lead from the United States, where the S&P 500 Index closed within 9 points of its record high set in October 2007 and the “fear gauge" – officially the Chicago Board Options Exchange Volatility Index, a measure of market volatility – reached its lowest level since February 2007.

The Hang Seng was down 0.9 per cent, the Nikkei slipped 0.3 per cent and Shanghai lost 1.0 per cent.

The S&P/ASX 200 Index shed 0.6 per cent, or 29 points, retreating from Monday’s 4¾-year high to close at 5117.9.

Santos
, which has an environmentally controversial coal seam gas venture near Gunnedah in NSW, lost 3 per cent to $13.14.
AGL Energy
, which has CSG projects in Camden and the Hunter in NSW, fell 1.6 per cent to $16.27.

“It’s not a good thing for any of these guys," Platypus Asset Management senior resources and energy analyst
Anna Kassianos
said.

Miners were another drag on the index. Mining stocks have performed poorly in the last week on underwhelming economic data out of China and news Beijing is taking action to cool the domestic housing market.
Rio Tinto
shed 1.2 per cent to $61.92 and
BHP Billiton
slipped 0.2 per cent to $35.67.

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Iron ore traded at $144.10 this week, the Steel Index says, its lowest price this year. The commodity is down 9.3 per cent since it peaked in mid-February.

Fortescue Metals Group
was down 3.0 per cent to $4.24 on Tuesday and Atlas Iron fell 2.0 per cent to $1.30.

The S&P/ASX 300 mining and metals index has fallen 7.2 per cent in the year to date, while the financial sector index is up 16.1 per cent over the same period.

The financial index outperformed the broader benchmark index on Tuesday, falling less than 0.1 per cent.
ANZ Banking Group
,
Westpac Banking Corporation
and
National Australia Bank
all closed slightly down.

The
Commonwealth Bank of Australia
continued its climb into record territory, rising 0.5 per cent to $70.58. It is poised to overtake BHP Billiton as the biggest stock by market capitalisation in Australia. Valued at $113.57 billion, it sits just under BHP at $114.5 billion.

“With a more cautious short-term outlook we increase our exposure to the ‘defensive high-yield’ thematic," they said.

However, Platypus Asset Management’s Ms Kassianos said the fund manager remained confident that resources stocks would join the equity rally, most likely in the second half of the year, as the world economy picked up pace on improvements in the Chinese and US economies.

“It could be earlier. I think it’s going to sneak up on people," she said.

Southern Cross Media was one of the biggest climbers on the main index, gaining 2.7 per cent to $1.72.

The other listed television stations all closed in the red.
Ten Network
lost 2.6 per cent to 37¢,
Prime Media
fell 1.7 per cent to $1.18 and
Seven West Media
was down 1.3 per cent at $2.35. A merger between Nine and Southern Cross could force Ten to look for a new regional partner to distribute its content as it has a deal with Southern Cross.